Moving From Medicaid to Medicare Comes With Significant Changes. Here’s What You Need To Know.
For Colorado’s lower-income individuals approaching retirement age, one of the many changes and challenges they face is the transition from Medicaid to Medicare. This transition can mean a significant adjustment in terms of costs, the scope of coverage, and how coverage works.
The transition can be even more confusing for “dual-eligible” individuals (those eligible for both Medicaid and Medicare).
If you are facing this critical crossroads in your healthcare coverage, here are the steps you need to take to transition from Colorado Medicaid to Medicare.
Understand the Differences Between the Two
Many people confuse Medicaid with Medicare, but, in actuality, these are two distinct programs. The federal government established the Medicare program in 1965 to cover most healthcare costs for Americans 65 or older and individuals under 65 with specific disabilities. Eligibility for Medicare is unrelated to a participant’s assets, income, or wealth.
Conversely, Medicaid is a state and federally-funded program designed to provide medical care and coverage for low-income individuals and families. Since 2016, Colorado Medicaid has been called Health First Colorado.
There are many vital differences between Medicaid and Medicare, including:
As a means-tested program, Medicaid generally has lower cost-sharing requirements (copays and coinsurance) than Medicare. Since Medicare is not means-tested, all enrollees’ cost-sharing requirements are the same.
This can be a significant adjustment for individuals transitioning from Medicaid to Medicare, who are used to the lower cost-sharing requirements of Medicaid. However, many Medicare beneficiaries are also eligible to receive Medicaid financial assistance to help pay Medicare premiums, reduce prescription drug costs, and pay for expenses (like long-term care) that are not covered by Medicare.
Scope of Coverage
Another difference between Medicaid and Medicare is the scope of coverage.
Medicaid covers a wide range of healthcare services, including doctor visits, hospital stays, prescription drugs, and long-term care services.
Medicare also covers these services, but the coverage can be more limited in some areas. For example, Medicare does not cover long-term care services in the same way that Medicaid does.
Access to Providers
Doctors expect payment for their services, often as reimbursement from the government through Medicaid, Medicare, and other programs.
However, Medicaid reimbursement rates for healthcare providers are often lower than Medicare reimbursement rates. This can make finding healthcare providers who will accept their coverage problematic for Medicaid beneficiaries.
On the other hand, since Medicare reimbursement rates are generally higher, more healthcare providers are willing to accept Medicare coverage. This may be a distinct advantage to those moving from Medicaid to Medicare.
Determine your Eligibility for Medicare
You are eligible to enroll in Medicare if:
- You are turning 65 and are receiving Social Security or Railroad Retirement Board benefits.
- You are under 65 and have received disability benefits for 24 months.
- You have Lou Gehrig’s disease (ALS) and start getting disability benefits.
Enroll in Medicare
With some exceptions, you must enroll in Medicare during your Initial Enrollment Period (IEP). Typically, your IEP is a seven-month period that begins three months before the your 65th birthday month, and ends on the last day of the third month after your birthday month.
While you can still sign up for Medicare after your IEP ends, you will have to pay penalties, including a 10 percent increase in your Part B premium.
You can enroll in Medicare online here if any of the following apply to you:
- You are within three months of turning 65 or older.
- You want Medicare benefits and don’t have Medicare coverage.
- You want to wait to apply for monthly Social Security retirement benefits.
- You reside in the United States or one of its territories or commonwealths.
Related: How and When to Enroll in Medicare
Notify Health First Colorado
Once you have enrolled in Medicare, you should notify Health First Colorado. Unless you are eligible for both programs, your Medicaid coverage will end when your Medicare coverage begins.
Understand the Coordination of Benefits
If you are dual-eligible, changing from Medicaid to Medicare requires coordination between the benefits. Medicare will be the primary payer for your healthcare expenses, while Medicaid will be the secondary payer.
Simply put, Medicare will pay first, and Medicaid will pay for any remaining costs.
Choose a Medicare Plan
Contrary to what many people believe, Original Medicare (which includes Part A (hospital insurance) and Part B (medical insurance) is not free health care for the rest of your life.
While the program does pay a substantial portion of your medical and healthcare costs, Medicare does not pay for everything. You will be responsible for coinsurance, copays, deductibles, and services not covered by Medicare. And as you will likely need more care as you get older, including things like long-term care, cancer treatments, or other expensive procedures, the costs not covered by Medicare can become astronomical.
Because of the potentially devastating financial blow that may come with hefty medical bills, many Medicare enrollees also enroll in a Medigap, or Supplemental Medicare, plan. Medigap insurance refers to plans issued by private insurance companies to pay for those costs that Medicare doesn’t cover or provide benefits not offered by Medicare Parts A and B. You may also enroll in a Medicare Advantage plan (Part C), which provides comprehensive coverage through a private insurance company.
Transitioning From Colorado Medicaid to Medicare? Call the Experienced Medicare Brokers at Preferred Insurance Today.
Understanding how these aspects of Medicare interact and determining your best options can be complicated and overwhelming. That is why many Coloradans transitioning from Medicaid to Medicare work with an experienced Medicare insurance broker like Preferred Insurance.
Whether you need help understanding the ins-and-outs of how Medicare works, determining your supplemental Medicare coverage needs, or exploring your Medicare Advantage and prescription drug options, working with an experienced Medicare broker is the easiest and best way to get the right coverage at the right price.
Contact Preferred Insurance today to schedule a free consultation to discuss your Medicare needs.